A HK$1discount offered to increase newspaper sales during the 2003 SARS outbreak has sucked news vendors in the Yau-Tsim- Mong districts into a raging price war.

The Hong Kong Newspaper Hawkers Association, in a bid to end the war, had called on 200 newspaper vendors in the area to return to selling at full cost - HK$6 - beginning at the start of this month.

Only 90 percent of the newspaper hawkers, however, followed the nonbinding call.

The defiant 10 percent are still selling newspapers for less than the designated price, which many fear, will result in a vicious circle.

The association yesterday asked newspaper producers and distributors to remind all 2,200 newspaper stall vendors in Hong Kong to sell at the printed price of HK$6.

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The HK$1 discount should end now that the economy has fully recovered, according to the association.

Yeung Man-keung, association vice chairman, said their members will be in deep water should the price war continue.

"The wholesale price for a Chinese newspaper is HK$4.35 and rises by 20 cents when adding the cost for plastic bags and free tissues," Yeung said, adding that they will only have a margin of 50 cents instead of HK$1.50 if the papers were sold at a HK$1 discount.

"Business costs have increased because of inflation and the price-cutting by some members will drive the decent ones out of business."

The association hopes that if the nonbinding call proves successful, it will be extended to all stalls in the territory.

"I am optimistic circulation will not drop after we've stabilized the price. Maybe there's even a chance the [newspapers] publications themselves will increase the retail price to HK$7," Yeung said.

Cheung Tak-wing, another vice chairman, said the producers' and distributors' cooperation is important as they they have more clout than the association.

Some convenience stores have indicated they will reinstate the printed price too if the news vendors will do so.

Some distributors have agreed to follow up the matter.

Great Expect Development, the general agent of Oriental Daily and The Sun, has issued letters to all vendors to indicate its support for standardizing the retail price.

Yuen Tak-hung, general manager of the company, agreed that the price war by individual newspaper vendors will not boost overall circulation.